Summary of GST proposals under Finance Bill 2023

Union Budget 2023 has been presented today by the Honorable Finance Minister. Highlights of the proposed changes related to GST are summarized as follows:

• Clause (d) of sub-section (2) and Clause (c) of sub-section (2A) in Section 10 of the CGST Act is being amended so as to remove the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the Composition Levy. Such restriction shall continue for supply of services.
• Provisos to S. 16(2) related to reversal under Rule 37 have been proposed to be amended to allow reversal as per rule prescribed for it.
• Explanation to S.17(3) is being amended to include in the value of exempt supplies, the value of such activities or transactions as may be prescribed in respect of clause (a) of paragraph 8 of the said Schedule.
• 17(5)(fa) is being inserted to block ITC on goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013.
• 23 is being amended retrospectively w.e.f 01.07.2017 to give it an overriding effect on the provisions of S. 22(1) & S. 24.
• The returns under S. 37, S. 39, S. 44 & S.52 cannot be filed for a tax period after the expiry of a period of three years from the due date of furnishing the said returns.
• 122(1B) of the CGST Act is being inserted so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers.
• Following offence u/s 132 have been proposed to be de-criminalised:
• obstructs or prevents any officer in the discharge of his duties under this Act;
• tampers with or destroys any material evidence or documents;
• fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information;
• 132(1)(iii) has been proposed to be amended so as to increase the monetary threshold for launching prosecution for the offences under the said Act from 1 crore rupees to 2 crore rupees, except for the offences related to issuance of invoices without supply of goods or services or both.
• 138 has been proposed to be amended to exclude the persons involved in offences relating to issuance of invoices without supply of goods or services or both from the option of compounding of the offences. The minimum amount shall now be twenty-five per cent. of the tax involved and the maximum amount shall not be more than one hundred per cent. of the tax involved.
• A new section 158A in the CGST Act is being inserted so as to provide for prescribing manner and conditions for sharing of the information furnished by the registered person in his return or in his application of registration or in his statement of outward supplies, or the details uploaded by him for generation of electronic invoice or Eway bill or any other details, as may be prescribed, on the common portal with such other systems, as may be notified.
• Activities & transactions under Paras 7, 8(a) & 8(b) of Schedule III to the CGST Act were Inserted by the Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 1-2-2019. The same are now proposed to be given retrospective applicability w.e.f 01.07.2017. However, It is also being clarified that where the tax has already been paid in respect of such transactions/ activities during the period from 01st July, 2017 to 31st January, 2019, no refund of such tax paid shall be available.
• Clause (16) & (17) of S. 2 of the IGST Act are proposed to be amended to alter the definition of “non-taxable online recipient” & “online information and database access or retrieval services”.

Disclaimer:

This document is strictly for academic purpose only. The information provided in this document must not be construed as any legal or professional opinion of the author.